Exchange ownership

The London Stock Exchange has ruled out the introduction of a central counterparty for its electronic order book (Sets) on grounds of cost. Although the analysis of its executives has no doubt been thorough, their conclusions will raise suspicions that they are designed to serve the interests of the members rather than the users of the exchange.

The present system, the counterparty supporters claim, allows some of the large securities firms to continue to earn generous market-making profits by facilitating the trades of small...